Plan Ahead For Increase In THC Package Limits

Tonkon Torp LLP

Tonkon Torp LLP

Starting in January 2022, the amount of THC allowable in edibles sold through a retail store will raise to 100 mg of THC per package, which is double the previous per-package limit of 50 mg. This is great news for consumers and the industry alike, and it puts Oregon’s regulations on per-package limits more in line with other legalized states.

However, retailers and packagers must not lose sight of the fact that 50 mg of THC per package remains the current legal standard. The bill (SB 408) directing the Oregon Liquor and Cannabis Commission (OLCC) to increase per-package THC limits is not effective until January 1, 2022. Further, OLCC must adopt specific rules that allow for the increase first, before it is lawful to manufacture and sell 100 mg THC packages of edibles to recreational customers. The OLCC, currently in the rulemaking process, recently held an advisory committee meeting to discuss the implementation of this allowance and seem to be striving to have permanent rules in place on or shortly after the SB 408 effective date. While this is helpful for industry participants who want to take advantage of the increase, there are many steps businesses need to take to get 100 mg products to recreational consumers.

Raising the total THC limit per package will require new label approval

To create edible products with more than 50 mg of THC per package, licensees will need to resubmit their approved labels for re-approval. The OLCC has indicated that it cannot approve these new labels until the new rules are effective (January 1, 2022 at the earliest). It is therefore anticipated that the OLCC will receive a high volume of resubmission requests within a very short window of time, from a number of licensees seeking new label approval. It is important to have your new label submissions ready to go and into the OLCC as soon as possible so that they can be processed shortly after the rules go into effect. Consult with your legal counsel regarding new labeling approvals before you order new labels and packaging reflecting the higher THC limit.

Raising the total THC limit will require new control studies

Many cannabis processors obtained control studies as part of their manufacturing processes, allowing them to reduce sampling and testing costs by demonstrating consistency in their products and manufacturing techniques. Any licensee hoping to take advantage of the increased per-package THC limits should consider whether they must obtain new control studies as well.

The OLCC has indicated, however, that changes in regulations pertaining to control studies (regulated by the Oregon Health Authority) are likely in the near future. They have yet to offer guidance on what those change could be. If you are hoping to begin selling 100 mg products to recreational consumers starting in January, and you utilize control studies to reduce testing costs, contact your legal counsel to discuss your best options moving forward.

Processing of hemp and sales to non-licensed businesses

Starting in January 2022, OLCC-licensed processors will also be able to take in ODA-registered industrial hemp, process it, and transfer it back to the open market. This privilege used to be a one-way street; any hemp coming into a licensed processor could only be sold within the OLCC-licensed system. This restriction created problems for the hemp industry and for licensed businesses with regards to making or accepting returns, and it limited the marketplace in which OLCC-licensed processors could participate.
With the new and improved allowance comes new requirements, however. All products manufactured by an OLCC processor are subject to testing, packaging/labeling, and tracking requirements, and that will be the case for all hemp items produced for non-licensed businesses as well.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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